You honestly cant go wrong with either but these apps do differ in a few key ways.
You may spot a clear winner, depending on your investing goals and personal preferences.
Probably not as good as youd like.
Want to keep shopping around? Check out our review of thebest robo-advisors.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
Betterment vs. Wealthfront: How Do They Compare?
Thats $2.50 a year for a $1,000 account balance.
For reference, traditional brokerage firms like Edward Jones charge yearly fees of 1% or more.
They usually require more cash to open an investment account, too.
And whilemicro-investing appslikeAcornsandStashlet you start investing with just $1, youll pay a minimum $3 a month.
For a $1,000 account balance, thats $36 a year instead of $2.50.
Some online discount brokerage services like Robinhood dont charge any yearly fees.
Digital plan members can also access personalized financial advice, but for an additional fee.
Wealthy investors get a 0.10% discount on the portion of their household balance above $2 million.
Wealthfront
One of the biggest differences between Wealthfront and Betterment is their investment minimum.
Wealthfrontrequires a $500 minimum deposit to start investing.
Theres a $1 minimum to open a cash management account.
Other Fees
The only other fee youll encounter with Betterment or Wealthfront is ETF expense ratios.
Types of Accounts
Betterment and Wealthfront give you options.
Depending on your financial goals, it might open one of each.
They also give you financial planning tools to create your own personalized retirement roadmap and track your progress.
Cash Management Accounts
Both robo-advisors offer digital banking services with no fees.
Thats right: Betterment and Wealthfront offer savings/checking accounts with no overdraft fees or minimum balances.
Wealthfront offers reimbursement at 19,000 ATMs, but Betterment is the clear winner on ATM fees.
Betterments Visa debit card reimburses all ATM fees worldwide.
Youll also skip foreign transaction fees when you use your debit card abroad.
you’re free to start using Betterments banking features for free.
Youll need $1 to open a Wealthfront cash management account.
You dont need to invest with either company to access their cash management services.
A529 college savings planis a tax-advantaged way to save and invest for higher education costs.
You wont pay any annual fees on the first $5,000 invested in a Wealthfront 529 plan.
After $5,000, fees range from 0.42% to 0.46%, plus expense ratios.
Other similarities include:
Betterment focuses on goal-based investment strategies.
It offers users a core investment portfolio consisting of stock- and bond-based exchange-traded funds (ETFs).
That means all your money is invested from day one.
Wealthfront, in contrast, does not offer fractional share investing.
However, Wealthfront offers more opportunities for hands-on investment management than Betterment.
Users also get the option to invest in portfolio themes like technology and health care.
Betterment does not offer exposure to these alternative investments.
Wealthfront doesnt offer this service to its clients.
Betterment does, but its not unlimited access for everyone.
Tax Strategy
Both Betterment and Wealthfront use advanced software to minimize capital gains taxes.
Both robo-advisors perform daily tax-loss harvesting on all taxable accounts.
Tax-loss harvesting is a strategy that sells underperforming assets for a loss for offset capital gains taxes.
This makes it easier for the company to sell securities, offset gains and provide additional tax-loss harvesting opportunities.
Financial Planning Tools
Betterment and Wealthfront both give you access to powerful and easy-to-use online planning tools.
Both robo-advisors let you link external accounts to provide a holistic, high-level look at your entire financial picture.
you might also pick different goals, such as saving up for a home or investing for retirement.
Betterments tools let you see how a one-time deposit, recurring deposits and early withdrawals can impact your goals.
Meanwhile, Wealthfront offers a free planning tool called Path.
You dont need a Wealthfront investment account to access Path.
Like Betterment, Wealthfront analyzes your financial data to double-check youre on track to meet your goals.
But the Path tool includes some additional neat features.
Unique Features
These robo-advisor rivals share more similarities than differences.
Heres what sets them apart from each other.
Here are the features youll only find with Wealthfront.
Heres what Betterment offers that Wealthfront doesnt.
Betterment vs. Wealthfront: Which Is Right for You?
Its hard to pick a clear winner.
Betterment and Wealthfront both make investing easy by offering useful features like daily tax-loss harvesting and wealth-building tools.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
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We can’t personalize articles for our readers, so your situation may vary from the one discussed here.
like seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.
